Well, in terms of both image quality compared to each other and compared to Photoshop and in terms of loading speed. Will TimThumb take longer to load as it has to resize the image on the fly?
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fxfutureSep 26 '11 at 2:29

Also, more importantly, does TimThumb have to load the original file first or is this done server side?
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fxfutureSep 26 '11 at 2:41

1 Answer
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WordPress and TimThumb both use GD to resize images, so quality is going to be similar. GD's resize quality is not as good as Photoshop, you'll notice this especially in fine details.

Both WP and TimThumb can be modified to use ImageMagick, WP via a plugin, TimThumb I think requires you edit the code directly, which is not ideal. ImageMagick will give better results, but you obviously have to be able to install it on your server.

TimThumb creates images on-the-fly, but caches them so subsequent requests will pull the image from cache.

As for my opinion, I would stick with native WordPress functions to keep things simple, especially in light of the recent TimThumb exploit that compromised a lot of WordPress sites.